On February 11, 2025, Kentucky First Federal Bancorp (KFFB, Financial) released its 8-K filing, reporting a notable improvement in its financial performance for the quarter ended December 31, 2024. The company, a holding entity for First Federal Savings and Loan Association of Hazard and First Federal Savings Bank of Kentucky, operates primarily in Perry, Franklin, Boyle, and Garrard counties in Kentucky. It focuses on accepting deposits and originating loans secured by first mortgages on residential real estate.
Performance and Challenges
Kentucky First Federal Bancorp reported a net income of $13,000 or $0.00 diluted earnings per share for the three months ended December 31, 2024, compared to a net loss of $361,000 or $(0.05) diluted earnings per share for the same period in 2023. This represents a significant increase of $374,000 or 103.6%. For the six months ended December 31, 2024, the company reported a net loss of $2,000 or $(0.00) diluted earnings per share, a substantial improvement from the net loss of $536,000 or $(0.07) diluted earnings per share in the previous year.
Financial Achievements
The improvement in earnings was primarily driven by higher net interest income, which increased by $381,000 or 23.0% to $2.0 million. This was due to a rise in interest income, which grew by $857,000 or 21.8% to $4.8 million, outpacing the increase in interest expenses. The average rate earned on interest-earning assets increased by 80 basis points to 5.28%, while the average rate paid on interest-bearing liabilities rose by 44 basis points to 3.53%.
Income Statement Highlights
Non-interest income saw a significant increase of $125,000 or 271.7%, totaling $171,000 for the quarter, largely due to net gains on sales of loans. However, non-interest expenses also rose by $54,000, primarily due to increased professional fees, although this was partially offset by a decrease in employee compensation and benefits.
Balance Sheet and Cash Flow
As of December 31, 2024, Kentucky First Federal Bancorp's total assets stood at $374.2 million, a slight decrease from $375.0 million as of June 30, 2024. This was mainly due to a reduction in loans and investment securities. Cash and cash equivalents increased by $2.7 million or 14.7% to $21.0 million. Total liabilities decreased by $818,000 or 0.3% to $326.2 million, with a notable reduction in FHLB advances by $7.2 million or 10.4%.
Key Metrics
| Metric | December 31, 2024 | June 30, 2024 |
|---|---|---|
| Total Assets | $374.2 million | $375.0 million |
| Total Liabilities | $326.2 million | $327.0 million |
| Shareholders' Equity | $48.1 million | $48.0 million |
| Book Value Per Share | $5.94 | $5.94 |
Analysis
The financial results indicate a positive trend for Kentucky First Federal Bancorp, with improvements in net interest income and non-interest income contributing to the overall earnings growth. The company's strategic focus on increasing core deposits and reducing reliance on higher-cost funding sources appears to be yielding results. However, the slight decrease in total assets and the challenges posed by rising interest expenses highlight areas that require ongoing attention.
Overall, Kentucky First Federal Bancorp's performance reflects its ability to navigate a challenging economic environment, with a focus on enhancing profitability through strategic financial management.
Explore the complete 8-K earnings release (here) from Kentucky First Federal Bancorp for further details.
